With the national average home equity line of credit (HELOC) interest rate on the decline, homeowners are finding that a HELOC can provide a welcome solution for holiday cash flow needs. The current low pricing, based on the prime rate, makes a HELOC more affordable than it has been in three years.
According to Curinos data, the average weekly HELOC rate stands at 7.44%. This rate is applicable to applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%. Homeowners collectively held nearly $36 trillion in home equity at the end of the second quarter of 2025, marking the highest amount of home equity on record.
With mortgage rates still above 6%, homeowners are reluctant to part with their primary mortgage, making selling a house or opting for a cash-out refinance less appealing. Opting for a HELOC allows homeowners to access some of their home equity without giving up their low mortgage rate.
HELOC interest rates differ from primary mortgage rates as they are based on an index rate plus a margin. Typically, the index rate is the prime rate, which has recently dropped to 6.75%. By adding a margin of 0.75%, the HELOC rate would be 7.50%. Lenders have some flexibility in pricing HELOCs based on factors such as credit score, existing debt levels, and the credit line amount in relation to the home’s value.
It is essential to shop around for the best HELOC rates as national averages may include introductory rates that could increase after a specified period. By retaining their low-rate mortgage and exploring a HELOC, homeowners can access their home equity while continuing to pay down their primary mortgage.
Top HELOC lenders offer low fees, fixed-rate options, and generous credit lines, allowing homeowners to utilize their home equity as needed. HELOCs offer the flexibility to borrow and repay funds as required, with interest only accruing on the amount borrowed.
Currently, LendingTree is offering a HELOC APR as low as 6.36% on a $150,000 credit line. It’s important to consider that HELOCs typically come with variable interest rates that may fluctuate over time. Prospective borrowers should compare fees, repayment terms, and minimum draw amounts to find the best option for their financial needs.
HELOCs provide the advantage of tapping into only the necessary funds while keeping a line of credit available for future needs. By borrowing responsibly and repaying promptly, homeowners can leverage their home equity for various purposes, such as home improvements, repairs, or even leisure activities like vacations.
While a HELOC can offer financial flexibility, borrowers should be mindful of the repayment terms and potential interest rate fluctuations. It is advisable to borrow and repay the balance within a shorter period to avoid the HELOC essentially turning into a 30-year loan.
Overall, with favorable HELOC interest rates and a substantial amount of equity in their homes, now may be an opportune time for homeowners to consider leveraging their home equity for financial needs. By carefully evaluating their options and committing to responsible borrowing practices, homeowners can make the most of a HELOC while maintaining their low mortgage rate.
